USPS v. PRC, No. 15-1018 (D.C. Cir. 2016)
Annotate this CaseThe Postal Service challenged the Commission's denial of its request to have one of the Service's products, the "round-trip mailer," used in the DVD-by-mail industry, classified as competitive rather than market-dominant. The Postal Service contends that streaming services and DVD-by-mail services compete with each other and, under antitrust law, should be treated as a single market. The court concluded that the Commission was reasonable in finding that the Postal Service produced no evidence to establish at what point an increase in the price the Service charged would cause Netflix and Gamefly to look elsewhere for distribution. The Service enjoys market power in the (upstream) distribution market regardless of conditions in the (downstream) content market because it does not face any competition in the distribution market. The court rejected the Postal Service's claim that Netflix has sufficient economic clout to counter the Service's market power because Netflix and GameFly have no alternative means to transport DVDs by mail. Finally, the court concluded that the Commission was not unreasonable to hold that the potential technological evolution suggested by the Service was too speculative to condition its market power analysis here. Accordingly, the court denied the petition for review.
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